How LendingTree May Affect Your Credit Score

Using LendingTree to compare loan offers won't harm your credit score. However, the process can lead to a hard inquiry if you formally apply with a lender from its network.

1. Initial Soft Inquiry: When you first check rates on LendingTree, the platform performs a soft credit pull. This initial step does not impact your credit score and is used to match you with potential lenders.
2. Reviewing Offers: Based on the soft inquiry, you will receive pre-qualified offers from various lenders. Simply viewing these potential loan terms and rates has no effect on your credit score.
3. Formal Application & Hard Inquiry: The impact occurs when you select an offer and proceed with a formal application directly with that lender. The lender will then conduct a hard credit inquiry, which can cause a temporary, minor drop in your score.
4. Rate Shopping Protection: Modern credit scoring models often group multiple hard inquiries for the same type of loan (e.g., mortgage, auto) within a 14- to 45-day period as a single event, mitigating the damage from comparison shopping.
5. New Account Impact: If your loan is approved and you accept it, the new account will appear on your credit report. This can influence your score by changing your credit mix and average account age.

How Much Will LendingTree Affect Your Credit Score?

While using LendingTree to shop for rates is designed to have a minimal effect on your credit, several factors determine the actual impact. Here are the key things to consider.

• Soft vs. Hard Inquiries. The initial rate comparison on LendingTree results in a soft inquiry, which does not affect your score. A hard inquiry only occurs when you formally apply with a specific lender.
• Rate-Shopping Window. Credit scoring models typically treat multiple hard inquiries for a mortgage or auto loan within a short period as a single event. This allows you to shop for the best rates without significant penalty.
• Opening a New Account. Finalizing a loan with a lender found through the platform will create a new account on your credit report. This can temporarily lower your score by reducing your average age of credit history.

How You Can Avoid LendingTree Affecting Your Credit Score

Understand Inquiry Types

LendingTree's initial process involves a soft credit inquiry, which does not affect your credit score. The potential impact comes later. When you choose to proceed with a specific lender's offer, that lender will then perform a hard inquiry, which can temporarily lower your score.

Leverage the Rate-Shopping Window

Credit scoring models typically treat multiple hard inquiries for the same type of loan (like a mortgage or auto loan) as a single event if they occur within a short period, usually 14 to 45 days. Consolidate your applications to minimize any negative effects.

Apply Only When Serious

To prevent unnecessary hard inquiries, avoid submitting formal applications until you are serious about borrowing. Review the initial offers from LendingTree first. Proceeding only when you're ready ensures you don't accumulate inquiries from casual browsing or preliminary research on the platform.

Ways to Improve Your Credit Score

According to an expert guide, improving your credit score is an achievable goal that can significantly boost your financial health. With consistent, positive financial habits, you can take control and see meaningful changes over time.

• Establish automatic bill payments. Your payment history is the most significant factor in your score, so setting up automatic payments or reminders is crucial to avoid late fees and negative marks.
• Reduce your credit utilization ratio. Aim to keep your credit card balances below 30% of your total available credit, as high utilization can signal financial distress to lenders.
• Regularly monitor your credit reports. Check your reports from Experian, TransUnion, and Equifax to catch and dispute any errors or fraudulent activity that could be dragging down your score.
• Become an authorized user. If you have a trusted friend or family member with a strong credit history, being added to their account can help you build credit through their positive payment history.
• Diversify your credit mix. Lenders like to see that you can responsibly manage different types of credit, such as a mix of credit cards (revolving credit) and installment loans (like auto or personal loans).
• Limit hard inquiries. Only apply for new credit when necessary, as each application can cause a temporary dip in your score.

The Bottom Line

Using LendingTree to compare loan offers results in a soft credit pull that won't hurt your score. However, formally applying for a loan with a lender will trigger a hard inquiry.

Frequently Asked Questions

Does getting pre-qualified on LendingTree hurt my credit?

No, getting pre-qualified for loan offers on LendingTree only requires a soft credit inquiry, which does not affect your credit score at all.

What happens to my credit score if I accept a loan offer?

Accepting a loan offer will trigger a hard inquiry from the specific lender, which may cause a small, temporary dip in your credit score.

Will multiple loan applications through LendingTree damage my credit?

Credit scoring models often treat multiple inquiries for the same loan type within a short period as a single event, minimizing any negative impact.